DP16953 The lasting influence of Robert E. Lucas on Chicago economics

Author(s): Harald Uhlig
Publication Date: January 2022
Keyword(s): business-cycle theory, Chicago economics, Growth Theory, Microfoundations, Monetary Neutrality, Robert E. Lucas
JEL(s): B22, B31
Programme Areas: Monetary Economics and Fluctuations, Macroeconomics and Growth
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=16953

This paper is an overview from a personal perspective on the various ways Lucas has shaped today's economics in general and in terms of 'Chicago economics' in particular. In honor of the 50th anniversary of its publication, much focus is given to his 1972 neutrality paper and its impact. I discuss how the paper was a trigger of the subsequent emergence of rational expectations macroeconomics. Further, I touch upon his fundamental contributions to growth theory, asset pricing and the characteristic use of the Bellman equations. After covering these topics, the paper concludes with a portrayal of the Money and Banking Workshop to describe the environment that Lucas established at the Chicago department, and to illustrate his enduring influence on the culture of teaching and discussing macroeconomics at the University of Chicago.